Slide 1: First Quarter 2014 Earnings Conference Call
FIRST QUARTER 2014 | EARNINGS CONFERENCE CALL
Slide 2: Forward-Looking Statements
2 FORWARD-LOOKING STATEMENTS The following information contains forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning Colfax's
Slide 3: Colfax
Fa “a. — COLFAX Sa
Slide 4: Q1 2014 Highlights
4 Q1 2014 HIGHLIGHTS • Adjusted net income of $51.6 million ($0.43 per share) compared to $33.6 million ($0.26 per share) in Q1 2013 • Net sales of $1.05 billion, an increase of 11.3% from Q1 2013 net sales of $947.1 million (an organic increase of 5.6%) • Adjusted operating income of $94.1 million
Slide 5: Gas and Fluid Handling
GAS AND FLUID HANDLING
Slide 6: Gas and Fluid Handling Highlights
6 GAS AND FLUID HANDLING HIGHLIGHTS • Net sales of $573.9 million, an increase of 35.0% from Q1 net sales of $425.1 million in Q1 2013 (an organic increase of 15.6%) • Adjusted segment operating income of $56.0 million and adjusted segment operating income margin of 9.8% • First quarter orders of $5
Slide 7: Orders and Backlog
7 ORDERS AND BACKLOG $502.1 $583.4 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 Q1 2013 Q1 2014 - 200.0 400.0 600.0 800.0 1,000.0 1,200.0 1,400.0 1,600.0 1,800.0 $1.58B $1.44B ORDERS BACKLOG(1) Q1 Existing Businesses 2.2% Acquisitions 14.4% FX Translation (0.4)% Total Growth 16.2% (1) Backlog data
Slide 8: Geographic Exposure
8 GEOGRAPHIC EXPOSURE Q1 2014 REVENUE $425.1 $573.9 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 Q1 2013 Q1 2014 71% 29% Foremarket Aftermarket REVENUE AFTERMARKET REVENUE Q1 2014 55% 45% Developed Economies Emerging Markets Note: Dollars in millions (unaudited). Q1 Existing Businesses 15.6% Acqui
Slide 9: Q1 2014 Sales and Orders by End Market
9 Q1 2014 SALES AND ORDERS BY END MARKET Power Generation 40% Oil, Gas & Petro-chemical 20% Marine 10% Mining 4% General Industrial and Other 26% SALES: $573.9 Million Total Growth (Decline) Organic Growth (Decline) Power Generation 46.7% 32.4% Oil, Gas & Petrochemical 26.1% 10.1% Marine 5.2% 3.3% M
Slide 10: Power Generation Market Perspective
10 POWER GENERATION MARKET PERSPECTIVE SALES & ORDERS GROWTH Q1 2014 vs. Q1 2013 Total Organic Sales 46.7 % 32.4 % Orders 19.6 % 13.6 % 43% • Served by both Howden and Colfax Fluid Handling • Driven by fundamental global undersupply of electricity • Growth continues to be driven by further environme
Slide 11: Oil, Gas & Petrochemical Market Perspective
11 OIL, GAS & PETROCHEMICAL MARKET PERSPECTIVE SALES & ORDERS GROWTH (DECLINE) 16% • Served by both Howden and Colfax Fluid Handling • Period over period comparisons are difficult due to the timing of large projects • Quoting activity strong in Middle East and Southeast Asia where we invested in loc
Slide 12: Marine Market Perspective
12 MARINE MARKET PERSPECTIVE SALES & ORDERS GROWTH 10% • Primarily served by Colfax Fluid Handling • Q1 orders strong for oil & gas service vessels • Continue to build on success of CM-1000; modest growth despite continued decline in overall shipbuilding activity • Received first retrofit order this
Slide 13: Mining Market Perspective
13 MINING MARKET PERSPECTIVE SALES & ORDERS (DECLINE) GROWTH 5% • Primarily served by Howden • Driven by demand of mined resources, including: coal, iron ore, copper, gold, nickel and potash • Remains a depressed market • Some bright spots; significant $5 million order for Australian coalmine and se
Slide 14: General Industrial & Other Market Perspective
14 GENERAL INDUSTRIAL & OTHER MARKET PERSPECTIVE SALES & ORDERS GROWTH 26% • Includes both Howden and Colfax Fluid Handling • Volatile quarter to quarter due to large orders • Large steel order for Howden, part of a continuing trend of plant upgrades and replacements • Secured a number of orders for
Slide 15: Fabrication Technology
FABRICATION TECHNOLOGY
Slide 16: Fabrication Technology Highlights
16 FABRICATION TECHNOLOGY HIGHLIGHTS • Net sales of $480.4 million compared to net sales of $ 522.0 million in Q1 2013, a decrease of 8.0% (an organic decline of 2.5%) • Adjusted segment operating income of $53.9 million and adjusted segment operating income margin of 11.2% – 270 basis point increas
Slide 17: Geographic Exposure
17 GEOGRAPHIC EXPOSURE Q1 2014 REVENUE $522.0 $480.4 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 Q1 2013 Q1 2014 74% 26% Consumables Equipment REVENUE REVENUE Q1 2014 42% 58% Developed Economies Emerging Markets Note: Dollars in millions (unaudited). Q1 Volume (2.9)% Price/ Mix 0.4% FX Translatio
Slide 18: Results of Operations
RESULTS OF OPERATIONS
Slide 19: Income Statement Summary
19 INCOME STATEMENT SUMMARY (unaudited) Refer to Appendix for Non-GAAP reconciliation and footnotes. Note: Dollars in millions, except per share amounts. March 28, 2014 March 29, 2013 Net sales 1,054.3$ 947.1$ Gross profit 325.6$ 290.7$ % of sales 30.9 % 30.7 % SG&A expense 231.6$ 214.2$ % of sales
Slide 20: eee. SS
eee. SS on | — COLFAX | a, —S= )
Slide 21: Disclaimer
21 DISCLAIMER Colfax has provided financial information that has not been prepared in accordance with GAAP. These non-GAAP financial measures are adjusted net income, adjusted net income per share, adjusted operating income, organic sales growth (decline) and organic order growth (decline). Projecte
Slide 22: Non-GAAP Reconciliation
22 NON-GAAP RECONCILIATION (unaudited) (1) The effective tax rates used to calculate adjusted net income and adjusted net income per share are 27.0% and 30.5% for the first quarter of 2014 and 2013, respectively. (2) Adjusted net income per share for periods prior to April 23, 2013 was calculated co
Slide 23: Non-GAAP Reconciliation
23 NON-GAAP RECONCILIATION (unaudited) _____________________ Note: Dollars in thousands. Corporate and Other Corporate and Other Net sales —$ —$ Operating income (loss) 53,098 9.3 % 50,451 10.5 % (15,811) 87,738 8.3 % 41,215 9.7 % 41,527 8.0 % (10,415) 72,327 7.6 % Restructuring and other related ch
Slide 24: Sales & Orders Growth
24 SALES & ORDERS GROWTH (unaudited) _____________________ Note: Dollars in millions. (1) Represents the incremental sales, orders and order backlog as a result of our acquisitions of Clarus Fluid Intelligence, LLC, CKD Kompressory a.s., the global industrial and industry division of Flakt Woods Gro
Slide 25: 2014 Outlook Summary (April Update)
25 2014 OUTLOOK SUMMARY (April Update) _____________________ Note: Guidance as of April 24, 2014. Revenue Range 2014 Total $4.85 billion To $4.99 billion EPS and Adjusted Net Income Range 2014 Net income per share (1) $1.96 To $2.21 Adjusted net income $304 million To $335 million 2014 Adjusted net
Slide 26: 2014 Outlook Summary (April Update)
26 2014 OUTLOOK SUMMARY (April Update) _____________________ Note: Guidance as of April 24, 2014. (1) Includes $12 million of transaction costs and year-one fair value adjustments. In thousands, except per share data LOW HIGH Revenue- Base Business 4,500,000$ 4,625,000$ Victor Technologies 350,000 3
Slide 27: Non-GAAP Reconciliation (April Update)
27 NON-GAAP RECONCILIATION (April Update) _____________________ Note: Guidance as of April 24, 2014. (1) Reflects the impact of the preferred stock conversion for GAAP EPS due to the anti-dilution of the if-converted method. (2) A substantial gain on tax valuation allowances will increase GAAP earni